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Flashcards by Florence Edwards, updated more than 1 year ago
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Description
BVSc Year 1 (Professional Studies) Flashcards on Principles of Veterinary Business, created by Florence Edwards on 04/15/2016.
Resource summary
| Question | Answer |
| What is meant by context? | Surrounding environment within which a business operates |
| What are the 3 types of context? | Internal Near External Far External |
| What is the internal environment? | Business itself |
| What is the near external environment? | All stakeholders in a veterinary business: Clients Competitors Suppliers Local community Local government |
| What is the importance of the relationship of a veterinary practice with its suppliers? | Affects speed and reliability of service Affects price of products |
| What is the role of the veterinary practice manager/owner in terms of the near external environment? | Role in balancing the conflicting interests of various stakeholders |
| Why is it beneficial for a veterinary practice to have a good relationship with the local community? | Factors such as providing jobs and skillful marketing increase positive perception of the practice |
| Define a stakeholder in a veterinary practice | People and organisations in the internal/ near external environment that have a legitimate interest in the activities of the practice and have a direct impact on it - the relationship is mutual as the practice can also influence or impact these people or organisations |
| What are the 5 main factors in the far external environment? | Sociological Technological Environmental Economic Political/Legal Remember using acronym STEEPL |
| Give 2 examples of sociological factors that affect veterinary practices | Pet ownership trends e.g. number of pet owners in the UK remaining static so veterinary practices increase prices to make a profit Humanisation of pets becoming more common |
| Give 3 examples of technological factors that affect veterinary practices | New drugs and pet foods New equipment Digital technologies such as Facebook changing how practices market themselves |
| What is the difference between disposable and discretionary income? | Disposable income is money left after legal and formal costs such as taxes and loan repayments Discretionary income is money left after all legal, formal and living costs |
| Give 4 examples of environmental factors that affect veterinary practices | Climate change - increased risk of flooding New diseases and viruses such as Schmallenberg Antibiotic and wormer resistance Environmental protection measures such as waste disposal, recycling and water metering |
| Give 5 examples of political/legal factors that affect veterinary practices | Compulsory microchipping Health and safety legislation Fire safety legislation Radiation protection legislation Employment laws |
| What are the 3 types of veterinary business? | Sole principal/proprietor Partnership Limited company |
| What is a sole principal veterinary practice? | Holds all responsibility i.e. suffers all risks and keeps all profits Can be a single premise, several surgeries or a veterinary group |
| What is the legal identity of sole principal veterinary practices? | Unlimited liability company |
| What is a partnership? | Two or more vets at a single premise or many branches Shared decision-making and profit |
| What is meant by joint and several liability within a traditional partnership? | Individual liability of partners plus group liability for the business as a whole |
| What is meant by a Limited Liability Partnership? | Partners' liability is limited to their investment in the business |
| What are the 2 possible legal identities of a partnership? | Ordinary Partnership Limited Liability Partnership |
| What is a Joint Venture partnership? | Board of elected joint venture partners direct the business and make key decisions Administrative aspects centrally managed |
| What is the legal identity of Joint Venture partnerships? | Limited Company |
| What is meant by a limited company? | Publicly registered charter recognising it as a separate legal entity - no individual liability for debts Owned by shareholders |
| What is the difference between a public and private limited company? | Privately limited companies have shares not available to the public - usually shareholders are a small group of employees/partners |
| What is meant by a cooperative veterinary practice? | Owned and operated by employees Shared profits and risks, shared ownership and decision making |
| What is the legal identity of not-for-profit veterinary practices? | Limited Company |
| How is practice income usually measured? | Turnover or total revenues (income) over a specified period of time, usually one financial year |
| Give 6 examples of direct costs for a veterinary practice | Drugs Surgical materials Lab tests Clinical waste disposal Cremations Locums |
| What are overheads? | Staff costs (salaries, pensions, training and CPD) Fixed costs such as rent, water, insurance and Internet |
| Give the equation to calculate gross profit | Gross profit = sales - direct costs |
| Give the equation to calculate net profit | Net profit = sales - total costs (direct costs + overheads) |
| How is return on investment calculated? | Expresses profit as a percentage of the capital invested in the business at the start (Net profit/ capital invested) x 100 |
| How is average transaction fee calculated? | Average transaction fee = total revenues/ number of transactions |
| How can average transaction fee be increased? | Only way to increase average transaction fee is to increase prices Clients may accept a price increase in line with inflation but unlikely to if it is greater than inflation |
| How is average transaction volume calculated? | Number of visits/number of clients For example, if 100 clients visit a practice 120 times the average transaction volume is 1.2 |
| How can average transaction volume be increased? | Encouraging the same clients to visit the practice more often, for example through pet health schemes |